Namakwa Diamonds Revenues Plummet in FY1H

Net Loss Grows to $15M

RAPAPORT... Namakwa Diamonds reported that revenues fell 60 percent year on year to $17 million during ‎the six months that ended on February 29, 2012 after shifting its focus to mining development.‎ The company posted a net loss of $15 million, compared with a net loss of $10.9 million one year ago.

‎“The first half of the financial year has been about the successful execution of our stated ‎strategy to restructure the group’s platform to provide for a mining operation underpinned by ‎sustainable commercial production from the Kao Mine,” said Richard Collocott, Namakwa’s ‎chief executive.‎

He added that the company is on track to become the biggest producer of diamonds in ‎Lesotho within the next 12 months and that the mine would become cash generative in the ‎second half of the fiscal year.‎

During the past year, Namakwa saw a change in management and focused its finances on ‎developing the Kao mine in Lesotho, while reducing the scale of its operations in South Africa’s ‎North West province to provide a cash generative platform. Namakwa also significantly ‎reduced its trading and beneficiation unit, closing its operations in Kinshasa, Tel Aviv and ‎Gaborone and selling its cutting and polishing business in Johannesburg. ‎

Production at Kao was launched in November 2011 and the mine began commercial production ‎in March this year. During the six months, 26,558 carats of diamonds were recovered from the ‎mine while 26,906 carats were sold for an average price of $214 per carat. As of April 24, ‎Namakwa reported that it sold 33,384 carats at an average price of $218 per carat. ‎

The company reduced its production forecast at the Kao mine for the full fiscal year to 170,000 ‎carats. ‎

Production at Namakwa’s South Africa-located alluvial mines fell 37 percent to 11,069 carats ‎during the fiscal half year, and output is expected to reach 20,000 carats for the full year. The ‎average price of goods sold from the North West operations declined by 2 percent to $632 per ‎carat, while the average cost at operations was halved to $589 per carat. ‎

Namakwa shares rose by less than one percent following the announcement and ended Friday ‎at 3.53 pence in London. The share was at 51 pence a year ago. ‎